Technology in Total Rewards

Electronic Signatures

Legislation approved by governments in the United States, Canada, the European Union and most countries around the world established the legality of e-signatures. When legally compliant e-signature software is used, e-signatures are as valid as traditional signatures.

In 1999 the Uniform Electronic Transactions Act (UETA) gave electronic signatures and documents, including contracts, the same legal standing as traditional handwritten signatures and paper documents. UETA is limited to certain types of transactions and all parties must agree to conduct the transaction electronically. Under UETA, an electronic signature could be an electronic sound, symbol, or process attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign it. The operational intent is that for the person executing the transaction it is the same as signing a document. All states signed on to UETA, except for New York which has its own similar law.

The Electronic Signatures in Global and National Commerce Act (ESIGN Act) was written to cover all 50 states and took effect in October 2000 creating guidelines to promote the use of electronic documents and signatures in interstate and global transactions. To a large extent the ESIGN Act simply codified procedures that had already been put into practice by a wide range of insurance and banking entities. ESIGN does not require the use of any particular type of technology to create an electronic signature or transaction. The use of electronic documents in consumer transactions that substitute electronic signatures wherever a signature is required in writing is also part of ESIGN. However, requiring a person to use or accept electronic signatures is not compulsory.

For an e-signature to have validity, all parties must show a clear intent to sign the document. This can be accomplished by typing their signatures, clicking on an “Accept” button, or drawing their signatures with a mouse or stylus. All parties must agree to conduct business electronically and an e-signature must be clearly affiliated with the person who signed.

The impact this act has had on online total rewards is broad. Plan administrators may design and implement systems for paperless administration with a higher degree of confidence that these transactions will hold up to legal challenges.

The ESIGN Act contains provisions regarding notary verification. In the past, there was no technology to accurately replicate a notary public mark but with the decrease in the cost of scanners, online identification, and electronic conferencing, the ability to complete electronic notarization has become a reality and there are now organizations that provide online notary services.

Today, the potential use of what is called eNotarization continues to grow. eNotarization is the process of getting documents notarized online, which can be done in only a few minutes. Not all states permit this. To get a document eNotarized, one must contact a Notary Public who notarizes documents electronically. The American Society of Notaries website is a useful reference to keep abreast of developments.

Some key highlights of e-signature solutions include:

• There are different kinds of e-signatures, and a majority of them are easily used with common electronic devices such as cell phones, tablets, and computers.
• E-signatures are 100% ink-free and paperless. The contract is stored in electronic form in an online storage system and can be easily retrieved as needed.
• E-signatures are fast and convenient. It takes less than a minute to sign a document and send it back with an e-signature. Not only that, but an e-signature is accessible from almost any connected device, making it accessible anywhere you are.
• Typically, e-signature solutions use security protocols on signatures to ensure the authenticity of an e-signature. Various types of secure protocols exist, including timestamps, recorded IP addresses, and security questions.
• E-signatures are safe and legal, but they are subject to more scrutiny in legal proceedings which may be alleviated by a solution that offers a very solid security system.
• Most document types such as agreements, I-9s, applications, and contracts are readily accepted with e-signatures.